Mortgage in a "Declining Market" area?

[normalflora]

Hello!

Just wondering if anyone has recently obtained 100% financing on a mortgage in the past few months in an area considered a "declining market." We were preapproved for our loan at 100% financing and then BOA changed the terms after the home was appraised. Looking on the web almost every zip code in our state is considered a declining market which apparently requires a 5% penalty (or down payment). Does the 100% loan exist anymore? We will end up losing this house if not able to obtain financing by next week.

Thanks,

Dan

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[usfgator]

I had the same thing happen to me with BOA in Florida. They approved everything and yesterday I happened to find out about the 5% when we were discussing locking my rate. Fortunately after panicing I was able to get family to let me borrow the 5%. As far as I understand these are Fannie Mae guidelines and cannot be broken unless the bank is willing to take the mortgage on alone without Fannie Mae. The declining market areas change quarterly so there is a chance your area can come off of the list in the future. I am sure there are more people around that understand this more than myself.

 

[DoctorWannaBe]

Hello!

Just wondering if anyone has recently obtained 100% financing on a mortgage in the past few months in an area considered a "declining market." We were preapproved for our loan at 100% financing and then BOA changed the terms after the home was appraised. Looking on the web almost every zip code in our state is considered a declining market which apparently requires a 5% penalty (or down payment). Does the 100% loan exist anymore? We will end up losing this house if not able to obtain financing by next week.

Thanks,

Dan

What was the website where you can check which zip codes are declining markets? I was told that I live in a declinining market but want to see if that has changed since I last talked to BOA.

 

[nettaw]

Hello!

Just wondering if anyone has recently obtained 100% financing on a mortgage in the past few months in an area considered a "declining market." We were preapproved for our loan at 100% financing and then BOA changed the terms after the home was appraised. Looking on the web almost every zip code in our state is considered a declining market which apparently requires a 5% penalty (or down payment). Does the 100% loan exist anymore? We will end up losing this house if not able to obtain financing by next week.

Thanks,

Dan

Hello. Have you been successful at finding a 100% mortgage program? I too am going through the exact same thing. Got preapproved a month ago with a Bof American Doctor's loan. My mortgage officer was very good about keeping in touch with me, making sure I received my paperwork etc.... Then last week I go house hunting, find a property I love, put a bid in which the seller quickly accepted, get the ratified contract over to BofAmerica. Then the next day while discussing rates he tells me my property in Washington, DC (along with N. VA and Maryland for the record) is in a "declining market" and they can only offer me 95% financing . I am still curious as to why the mortgage officer tells me this after I sign the contract and he knew for the last month what zip codes I was looking to purchase in. Ofcourse I have been scrambling since then to find another product. I tried VA loan but the property is not a VA approved condo. Now we are trying the FHA loan route but we are waiting to hear from the title company if its FHA approved since its only about 1 yr new along with some other stipulations. My family can help me with the 3% down associated with a FHA loan but not a penny more. I am trying to stay in good spirits. Renting would be difficult being that it costs just as much to rent as it does to buy in Washington DC, making it very difficult to further save for more of a down payment. Does anyone have any suggestions or know of any other lenders who are giving 100% (or close to it) financing for 1st time home buyers/residents?

 

[LADoc00]

100% financing is thing of the past. In fact in some entire zip codes in California, Wells Fargo has declared severe market conditions dictate 25% (yes 25 not 20) as a down payment.

When most solid homes are >700,000, that 25% could take a years and years to save up for your average primary care doc.

 

[xanthines]

You could always go the FHA route. They're raising the limits until 2009:

http://www.fhainfo.com/fhajumbo.htm

Better hurry!

-X

 

[LADoc00]

You could always go the FHA route. They're raising the limits until 2009:

http://www.fhainfo.com/fhajumbo.htm

Better hurry!

-X

Huh, doesnt FHA route still require you to get PMI with less than 20% down?

What happens when you are absolutely unable to get any PMI?? such as in what is happening now in Vegas, parts of CA and FL??

 

[Sol Rosenberg]

Huh, doesnt FHA route still require you to get PMI with less than 20% down?

What happens when you are absolutely unable to get any PMI?? such as in what is happening now in Vegas, parts of CA and FL??

FHA requires you to purchase mortgage insurance. Period. It doesn't matter how much you put down. The mortgage insurance is through HUD, so it is not "P"MI (P = Private) so I don't think that you would get turned down for HUD/FHA mortgage insurance. HUD/FHA mortgage insurance is also ~3X more expensive than most PMI.

These new "FHA Jumbo" loans referenced by the link above seem like the next recipe for disaster. FHA loans used to be capped at much more reasonable numbers to mitigate the higher risk of default, etc.

 

[DoctorWannaBe]

Hello. Have you been successful at finding a 100% mortgage program? I too am going through the exact same thing. Got preapproved a month ago with a Bof American Doctor's loan. My mortgage officer was very good about keeping in touch with me, making sure I received my paperwork etc.... Then last week I go house hunting, find a property I love, put a bid in which the seller quickly accepted, get the ratified contract over to BofAmerica. Then the next day while discussing rates he tells me my property in Washington, DC (along with N. VA and Maryland for the record) is in a "declining market" and they can only offer me 95% financing . I am still curious as to why the mortgage officer tells me this after I sign the contract and he knew for the last month what zip codes I was looking to purchase in. Ofcourse I have been scrambling since then to find another product. I tried VA loan but the property is not a VA approved condo. Now we are trying the FHA loan route but we are waiting to hear from the title company if its FHA approved since its only about 1 yr new along with some other stipulations. My family can help me with the 3% down associated with a FHA loan but not a penny more. I am trying to stay in good spirits. Renting would be difficult being that it costs just as much to rent as it does to buy in Washington DC, making it very difficult to further save for more of a down payment. Does anyone have any suggestions or know of any other lenders who are giving 100% (or close to it) financing for 1st time home buyers/residents?

When I talked to Bank of America a month ago, they said that Fannie Mae decides every 3 months which markets are declining markets. It could be that when you were pre-approved a month ago your area was not a declining market and since then it has changed to a declining market. If you can't come up with 5% down, the FHA loan is probably your best bet because I think there are few, if any, 100% programs.